Number of Establishments

The final results of the 2009 Annual Survey of Philippine Business and Industry conducted nationwide covered a total of 1,456 Construction establishments in business operation.

Among industries, Building of complete construction or parts thereof; civil engineering recorded the biggest number of establishments at 1,083 establishments or 74.4% percent of the total. Building installation ranked far second with 303 establishments or 20.8 percent and Building completion ranked third with 55 establishments or 3.8 percent. On the other hand, Site preparation had the lowest number with only 6 establishments or 0.4 percent of the total. Figure 1 shows the percent distribution of construction establishments by industry group.

Employment

Construction establishments generated a total employment of 146,538 in 2009. Of the total, 146,050 or 99.7 percent were paid employees while the remaining 0.3 percent were working owners and unpaid workers.

Building of complete construction or parts thereof; civil engineering having the most number of establishments also employed the largest number of workers with 120,350 or 82.1 percent of the total employment. Building installation and Building completion, ranked second and third, with 22,551 workers (15.4%) and 2,668 workers (1.8%), respectively. On the other hand, establishments engaged in Renting of construction or demolition equipment with operator hired the lowest number of workers with 268 (0.2%). Figure 2 displays the distribution of employment of construction sector by industry group.

The average number of workers for the sector was recorded at 101 per establishment. Among industries, Site preparation had the highest average number with 117 workers per establishment, closely followed by Building of complete construction or parts thereof; civil engineering with 111. Building installation and Building completion had 74 and 49 workers per establishment, respectively. The least number was for Renting of construction or demolition equipment with operator with 30 workers per establishment.

Compensation

Total compensation paid by Construction establishments to its workers amounted to PHP21.7 billion, translating to an average annual compensation of PHP148,304 per worker.

By industry, Building installation paid the highest average annual compensation amounting to PHP185,963. This was followed by Site preparation and Building of complete construction or parts thereof; civil engineering paying PHP177,959 and PHP141,814, respectively. The lowest average annual compensation was paid by Renting of construction or demolition equipment with operator amounting to PHP88,019. Figure 3 displays the average annual compensation of workers of construction sector by industry group.

Value of Output

Total value of output generated in 2009 by all Construction establishments was estimated at PHP174.4 billion.

Among industries, Building of complete construction or parts thereof; civil engineering contributed the biggest share in the value of output amounting to PHP150.0 billion or 86.0 percent of the total. Building installation was the second biggest contributor in the value of output with a share amounting to PHP21.2 billion or 12.1 percent while Building completion ranked third with an output value of PHP2.2 billion or 1.3 percent. Figure 4 shows the distribution of value of output of Construction sector by industry group.

Cost

Total cost, excluding compensation, incurred by all Construction establishments amounted to PHP141 billion in 2009.

Among industries, Building of complete construction or parts thereof; civil engineering spent the highest accounting 87.3 percent of the total cost or PHP123.1 billion. Building installation and Building completion were the second and third highest spender with a share of 10.9 percent (PHP15.3 billion) and 1.3 percent (PHP1.8 billion), respectively.

Revenue per Cost

The ratio of total revenue to total cost for the Construction sector was estimated at 1.34. This implies a revenue of PHP1.34 for every peso spent.

Among industries, Site preparation recorded the highest return with a revenue-cost ratio of 1.45 while Renting of construction or demolition equipment with operator recorded the lowest return with a 1.16 ratio.

Value Added

Value added generated by all Construction establishments was estimated at PHP42.4 billion in 2009.

Among industries, Building of complete construction or parts thereof; civil engineering recorded the highest value added amounting to PHP34.8 billion or 82.0 percent of the total. This was followed by Building installation with PHP6.8 billion or 16.1 percent while Renting of construction or demolition equipment with operator produced the lowest value added at PHP51.4 million or 0.1 percent of the total.

Labor Productivity

Labor productivity, measured as value added per worker, was recorded at PHP289,362 for all Construction establishments.

By industry, Site preparation was the most productive at PHP434,621 per worker. Building installation and Building of complete construction or parts thereof; civil engineering ranked second and third places with PHP302,487 and PHP288,810 per worker, respectively. Building completion was the least productive with PHP174,807 per worker. Figure 5 shows the distribution of value added per worker of Construction sector for all employment sizes by industry group.

Gross Addition to Tangible Fixed Assets

Gross addition to tangible fixed assets, defined as capital expenditures less sale of fixed assets, acquired by all Construction establishments amounted to PHP4.0 billion in 2009.

Building of complete construction or parts thereof; civil engineering registered the highest gross addition to fixed assets valued at PHP3.7 billion or 93.2 percent of the total. Building installation ranked far second with addition to fixed assets worth PHP238.3 million or 6.0 percent. However, no addition to fixed asset was reported by Renting of construction or demolition equipment with operator.

Change in Inventories

Total value of ending less beginning inventory for the Construction sector resulted to a negative change in inventory valued at PHP8.6 billion in 2009. Among industries, Building installation recorded the highest change in inventory worth PHP108.1 million, followed by Building completion worth PHP88.8 million. Building of complete construction or parts thereof; civil engineering reported a negative change in inventory amounting to PHP8.8 billion.

Subsidies

In 2009, establishments engaged in Building installation received PHP8.2 million worth of subsidies from the government to support their business operation. The rest of the industries did not receive any subsidy from the government.

TECHNICAL NOTES

Introduction

The 2009 Annual Survey of Philippine Business and Industry (ASPBI), conducted in 2010 with 2009 as reference year, is a continuing activity of the National Statistics Office (NSO). It is a nationwide undertaking which aims to provide data on the structure and trends of economic activities in the country.

The data collected from 2009 ASPBI serves as reliable bases upon which the government and the private sector can formulate policies and evolve economic development plans. Specifically, the survey results are used in constructing the national and regional income accounts of the Philippine economy; formulating development strategies and monitoring plans/policies in the attainment of national and regional goals; determining and comparing regional economic structures and performance; valuating conditions of the economy, employment and income perspective in order to make more informed decisions; evaluating business options, assessing opportunities for new investments and estimating market shares of industries; and providing updates for the frame of establishments.

Legal Authority

The legal authority for the conduct of the economic census and surveys is provided by various legislative acts and directives.

Commonwealth Act No 591 of 1940 is the law that created the Bureau of Census and Statistics (now the National Statistics Office). This organic law empowers the Bureau, among other things, to prepare for and undertake all census of population, agriculture, industry and commerce.

Confidentiality of Information. Section 4 of CA 591 states that: "Data furnished to the Bureau of Census and Statistics . . . shall not be used as evidence in court . . .; nor shall such data or information be divulged to any person except to authorized employees of the Bureau of Census and Statistics...". This is to assure local businesses and industries operating in the country that as required by law, all data reported to NSO will be kept strictly confidential. All of the survey data products that will be published will include only summary information, and these will not identify any individual business.

E.O. 352 (Designation of Statistical Activities that will generate critical data for decision-making by the Government and the Private Sector, dated July 1,1996) approves the ASPBI, and other major censuses and surveys of the agency, as designated statistical activities of the Government whose data are considered critical in the formulation of economic development plans and policy decision making.

Other legislative acts and presidential directives, as follows, were enacted to strengthen the mandate of NSO.

PD 418 (Reconstituting the Bureau of the Census and Statistics, to be known as National Census and Statistics Office, under the administrative supervision of the National Economic and Development Authority, dated March 20, 1974)

EO 121 (Reorganization Act of the Philippine Statistical System, dated August 4, 1987)

EO No 5 (Strengthening the National Statistics Office, dated July 29, 1998).

Scope and Coverage

The 2009 ASPBI covered establishments engaged in 14 economic sectors classified under the amended 1994 Philippine Standard Industrial Classification (PSIC), namely:

• Agriculture, Hunting and Forestry (A)
• Fishing (B)
• Mining and Quarrying (C)
• Manufacturing (D)
• Electricity, Gas and Water Supply (E)
• Construction (F)
• Wholesale and Retail Trade; Repair and Maintenance of Motor Vehicles, Motorcycles and Personal and Household Goods (G)
• Hotels and Restaurants (H)
• Transport, Storage and Communications (I)
• Financial Intermediation (J)
• Real Estate, Renting and Business Activities (K)
• Private Education (M)
• Health and Social Work (N)
• Other Community, Social and Personal Service Activities (O)

The scope of the survey was confined to the formal sector of the economy, which consists of the following:

• Corporations and partnership
• Cooperatives and foundations
• Single proprietorship with employment of 10 and over
• Single proprietorships with branches

Unit of Enumeration

Like all other establishments surveys conducted by the NSO, the 2009 ASPBI unit of enumeration is the establishment. The establishment is defined as a unit which engages, under a single ownership or control, in one, or predominantly one kind of activity at a single fixed location.

In actual practice, however, there are difficulties in applying the ideal definition so the establishment is defined in operational terms to take into account the organization and record-keeping practices of certain sectors by making the single location and activity criteria more flexible. This necessitates the use of the kind-of-activity unit for certain sectors as the single location restriction is eliminated.

Taxonomy of Establishments

An establishment may be classified according to its: economic organization, legal organization, industry, employment size, and geographic location.

The Economic Organization refers to the organizational structure or role of the establishment in the organization. An establishment may be single establishment, branch, establishment and main office with branches elsewhere, main office only, and ancillary unit other than main office.

The Legal Organization (LO) refers to the legal form of the economic entity which owns the establishment. An establishment may be Single Proprietorship, Partnership, Government Corporation, Stock Corporation, Non-Stock Corporation, and Cooperative.

According to industrial classification, the main activity of an establishment is determined by the activity from which it derives its major income or revenue. The amended 1994 PSIC, based on the International Standard Industrial Classification (ISIC) Rev3.1 was used to classify economic units according to their economic activities.

The size of an establishment is determined by its total employment (TE). Listed below are the employment size classifications and the corresponding codes used in the 2009 ASPBI.

Establishments are also classified by geographic area using the Philippine Standard Geographic Classification (PSGC). The PSGC is a systematic classification and coding of geographic areas of the Philippines. It contains the latest updates on the official composition of regions, provinces, cities, municipalities and barangays in the Philippines. The 2009 ASPBI adopted the PSGC as of December 31, 2009.

The 2009 ASPBI Questionnaires

The 2009 ASPBI utilized five types of questionnaires. These questionnaires were designed after taking into consideration the requirements of the main users. The questionnaires are listed below:

Establishments were asked to provide the following information:

Frame of Establishments

The 2009 ASPBI sampling frame was extracted from the 2009 List of Establishments (LE).

There were about 781,000 establishments in operation in the country in 2009. Distribution of these establishments reveals that about 609,000 establishments are classified as the informal sector and the remaining 172,000 establishments are classified as the "formal" sector. However, around 90% (154,000) of establishments classified in the "formal" sector are within the coverage of the 2009 ASPBI and thus, comprise the frame of the survey.

Sampling Design

The 2009 ASPBI used stratified systematic sampling with five-digit PSIC serving as first stratification variable and TE as the second stratification variable.

Geographic Domain. For establishments with TE of 20 and over, the geographic domain were the regions. For establishments with TE of less than 20, the whole country served as the geographic domain.

Industry Domain. The industry domain comprised 1,036 sub-classes (5-digit PSIC), regardless of employment size.

Employment Stratum. Some employment sizes were combined to comprise an employment stratum and were limited to only five strata for all sectors. The basic consideration for grouping was the concentration of establishments in the employment sizes.

Within the industry domains for each sector, the establishments were grouped according to the following employment stratum:

Sample size. For establishments with employment of less than 20, the sample size was obtained by applying the specific sampling rates for each employment stratum of the industry domain at the national level. The total sample size for establishments with employment of less than 20 was 11,466 establishments. For the Construction sector, the estimated total sample size for TE of less than 20 was 91.

For establishments with employment of 20 and over, the sample size was obtained by applying the specific sampling rates for the i^th employment stratum in the j^th industry stratum at the national level and allocating to the regions. The aggregate sample size for employment of 20 and over in all sectors was 17,242 establishments. For the Construction sector, the estimated sample size for TE of 20 and over was 825.

Response Rate

A total of 843 out of 916 or 92.0 percent sample establishments responded in the Construction sector. These include receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Concepts and Definitions of Terms

Book value is the initial value or acquisition cost of tangible fixed assets less accumulated depreciation.

Capital expenditures for tangible fixed assets include cost of acquisition of new and used fixed assets; fixed assets produced by the establishment for its own use; major alterations, additions and improvements to fixed assets, whether done by others or on own account. Fixed assets received from other establishments belonging to the same enterprise are valued as though purchased.

Change in inventories is equivalent to the total value of inventories at the end of the year less the value of inventories at the beginning of the year.

Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchaser prices including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.

Economic activity is the establishment’s source of income. If the establishment is engaged in several activities, its main economic activity is that which earns the biggest income or revenue.

Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.

Intermediate cost refers to expenses incurred in the production of goods and industrial services rendered such as materials and supplies purchased, fuels purchased, electricity purchased, and agricultural/forestry/fishery and industrial services done by others plus beginning inventory of materials, supplies and fuels less ending inventory of materials, supplies and fuels.

Inventories refer to the stock of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation is at current replacement cost in purchaser prices. Replacement cost is the cost of an item in terms of its present price rather than its original cost.

Revenue includes cash received and receivables for goods/products and by-products sold and services rendered. Valuation is at producer prices (ex-establishment), net of discounts, and allowances, including duties and taxes but excluding subsidies.

Salaries and wages are payments in cash or in kind to all employees, prior to deductions for employee’s contributions to SSS/GSIS, withholding tax, etc. Included are total basic pay, overtime pay and other benefits.

Social contributions paid by employers refer to payments made by the establishment on behalf of the employees. Examples are SSS, GSIS, Employees Compensation Commission (ECC), Philhealth and PAG-IBIG.

Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry.

Total employment is the number of persons who worked in for the establishment as of November 15, 2009.

Paid employees are all persons working in the establishment and receiving pay, as well as those working away from the establishment paid by and under the control of the establishment. Included are all employees on sick leave, paid vacation or holiday. Excluded are consultants, home workers, receiving pure commissions only, and workers on indefinite leave.

Unpaid workers are persons working for at least one third of the working time normal to the establishment and do not receive regular pay.

Working owners are owners who are actively engaged in the management but do not receive regular pay, i.e. not included in the payrolls. Managers and directors of corporations working for pay are reported as managers.

Value added is gross output less intermediate cost. Gross output for the Construction sector is value of output plus non-industrial services done for others (except rent income from land). Intermediate input is intermediate cost plus non-industrial services done by others (except rent expense for land) and other costs.

Value of output represents the sum of the receipts from domestic construction put in place, net receipts from construction activities abroad, receipts from products sold, receipts from industrial services done for others, receipts from goods sold in the same condition as purchased less the cost of goods sold; and value of fixed assets produced on own account and change in inventories of finished products and work-in-progress.

Source:  National Statistics Office
             Manila, Philippines